tv C-SPAN Weekend CSPAN July 24, 2011 6:00am-7:00am EDT
our society. if it political leaders says, gee, we just have to have more of these free trade agreement because it will help our country and help employment, then they do not have a firm grasp of what has happened in the past for these free trade agreements. it was politically feasible depending on a political leaders. i am not in the mode of bashing president obama or anything like that. i think the time has come for bold, innovative leadership on the part of the president of the united states. if we do not have that, and then it comes back down on our side and converse -- congress, and we take our cues from our constituents anyway. we lack that kind of cohesiveness that we need for leadership.
i think we need a strict examination of how we went in the short span a little over two years of from a president elected with a huge mandate, with a progressive mandate, and a congress that was run by residents in the house and the senate, where we had 59 votes. now the congress is in and around by the tea party on the house side and 53 votes on the democratic side in the senate. now there are about five and that are wobbly in the knees on a lot of issues. how did that happen? we need to look at that and examined it and find out why we have gone this far in the other
direction in just 2.5 years. i believe it is because we have not paid attention to the real problems of america. it is the jobs issue. especially among young people. young people cannot find a job -- that hangs around them not just for a couple of years but for the rest of their lives. that is one of the most debilitating things that happens in our society. >> i think it is important to understand that politics is not static and the economic realities within the next six months. those are pushing us closer and closer to a recession. a major downdraft in the economy
that we see showing up and all of the data currently, and all of the underlying factors moving us toward testing and potentially pushing us through the new financial crisis as well, given the ongoing exposure to a double dip in the house and crisis. it is caused by an employment as the original bubble. i think it would be a mistake to assume that what we are seeing in the lead up to the debt ceiling is going to be the politics that dominate the discussion. we have to play a role in redefining matt, but after the initial euphoria takes place, the realities of the debt inflation that is taking place
throughout the american economy that will grip large parts of europe, the slowdown taking place in asia, will be the dominant reality. you cannot dis invent the economic reality. you can interpret them in a way that will give us another opportunity. he has given us a platform when the opening week emerges in the next six to nine months. we will be in a dynamic political environment, because we are in a very serious economic situation that will impose realities on the political leadership in a new way that we have not seen in the last six months.
>> the american public wants a job. that is what this is about. they want to support their family in want a job. they want to be political leaders to develop a jobs agenda, a program that will create the jobs necessary in america. it is going to switch from this deficit, which is important but not the central issue. the central issue is putting people to work. we tried to make it an american agenda. it is a piece of the puzzle. there are many different bills involved in it. what we need is that the overarching program. it is this kind of thing. we need a comprehensive jobs
agenda, something that speaks to all of the pieces of the puzzle. we want to put the pieces of legislation that causes it to happen. there must be a voice that makes this a reality. we have to talk about the individual pieces. the elements of a successful program. we have to have that overarching message to the american public. the programs can create the opportunity for for this economy to return. hopefully we can grasp this and run with this.
>> as dynamic as the politics may be, i think we are going in the opposite direction. i am talking about presidential politics. it seems as if the political strategy of the administration -- let's talk about the specifics if we can. talk a little bit about in detail the china trade issue, the environment in getting comfortable with china. >> i am a member of the security review commission. this is like the bipartisan think tank. almost all of them have been unanimous.
i am not speaking for the commission. everything we do is up there. in the last 10 years, we have had trillions of dollars worth of trade deficits. you are outsourcing your manufacturing and bringing it back china's exports are made by foreign investor companies -- a lot of them. when ya -- when you are in -- shipping your manufacturing abroad, it cut your budget deficit. revenue that used to be produced here, does that are produced well are now being produced abroad. people that used to have the jobs in this country are now no longer paying taxes. we are putting money into
keeping them going through unemployment and other things. i have not heard anyone tying the budget deficit to the trade deficit. they always talk about the fact that you go into the store and cannot buy anything in america. china was a great civilization. the communist to control. we need foreign investment, foreign technology, foreign markets. that is the way we are going to build the comprehensive national power of china. use a term called comprehensive national power, political, economic.
the military is growing pretty rapidly. i went to china in 1981. you go there now, you see a very prosperous and billing country. they have a strategy. they are incentivizing our companies to outsource production to china instead of contributing to job growth in this country. there are various things we can do and we talk about that in our report. our guys get a tax break for building abroad. they do not have to pay taxes on that money they earned. is that a crazy policy or what? we talk about that in the report. the currency is substantially
undervalued. the kids from china coming here get an export subsidy from an underpriced subsidy. they build it in china and ship it back here. that is a large part of what is happening here. there is something called indigenous innovation. when china joined, they said about american companies, if you want access to the china market, you have to make stuff in china. when i joined, we said no more of that transfer. they will not do that, they tell american companies, if you want to sell to the chinese government, you have to be on this list of companies. you have to be a friend of china. our technology, our -- the
chinese is getting that technology and know-how in china. that is contrary to our obligation. they say that we are not forcing the companies, just telling them that we want them to transfer their technology if they want to partner with us. maybe we should hire -- there are all things we can do. our future is really being sacrificed. >> the challenge seems to be to practice this as a national incentive strategy.
hong a lot of proposals like this run aground because they are perceived as protectionist. it goes back to the right kind of leadership. what do you think about that? are we able to move beyond some of these -- adoration of the free trade god, if you will, that has persisted for the last couple of decades? >> i hope so. i hope we can remember fair trade not free trade. i remember the debates that i had with bill clinton. >> but it is time to replace those debates. >> when did it become wrong to protect america? what is wrong with protecting
america? i do not get it. when the policies that have been in place for the last 20 or 30 years are exactly the opposite. they do not protect america but harm america. look at the tax policies. why do we reward american companies if there are offshore drops -- jobs? there is still more in the tax policies that rewards the of shoring of american jobs. what is wrong with protecting american jobs? we adopted the policies the chinese have adopted. we should adopt similar policies and get away with it here. use our tax dollars to buy american-made equipment.
out of every gallon you by friday so, it goes out there to buy what? i had nothing to do with the bay bridge. it was a horrible mistake. save 10% -- thousands of jobs are in china and not in california, not in america. >> one of the things that the congressman is striving to do is if you take the 15 proposals that we have, within the g-20, you can find counterparts with and it. what they are saying is, we are not being protectionists, we are being reciprocal. 19 nations have multiples of
what we have today and what little we have today is because of people -- like mandy. tom harkin was the architect of the phrase, fear not free on trade. it is just there. these gentlemen, these members know that 11 of them have failed to deliver their promises. we look ahead to the three on the table. it is not free trade, simply fair trade. >> no question about it. i have been covering this for the better part of the last couple of decades and have watched these proposals, getting back to this idea, is that -- it
isn't it about time that before ideas, we have seen a near disastrous failure, this idea of a free trade and how we are supposed to raise all votes into american votes. the results are kind of in. why has the political environment not changed more than it has? even accounting for the distractions caused by the tea party, the all embracing focus we see now on cutting the budget. i am not sure why some of the economic thinking has not changed. these proposals, versions have been out for a while. now more than ever has been their moment.
>> there is a sector of the american economy that has not suffered because of the so- called free trade and trade imbalances that we have. the financial sector -- the financial sector. it has not suffered a bit. they have made quite a bit on this. why do we reflect free trade, when the facts are in? you have a huge sector with a lot of influence that likes things just as they are. that is what has happened in our society and from a broader perspective. being financial based economy, -- it is an old book.
reed is. it lays it all out. >> the underlying balance of power between labor and capital , and equilibrium for a long time has changed dramatically. that is why the labor movement is such a shadow of its former self. laborers are probably more restrictive than it was a century ago when migration was freer than it was. >> if i can take some of the recommendations in this report and apply them. a company manufactures solar
panels. it is the only one that manufactures solar panels. we have about 18 months. we will have to make a decision to go out of business in america. he says, china currency. the report is speaking two chinese currency. he said you need to understand the way in which china is financing the business system. it finances businesses with loans that are not available anywhere else. super cheap loans, loan rates and obligations that are unavailable. and then you have got the issue of make it in china policy. we cannot compete with that.
research. -- basic research. >> this is the only research company that doesn't all in america. others may assemble pieces in america, but -- >> do we want to have a national manufacturing policy or not? the other 19 members have such a policy that is very specific. it would not tolerate a circumstance where a 8 or 9% of american workers have been in the sector. it would not tolerate a world where china -- it gets its site for free, construction loans for
free. it dumbs emissions into the air. it starts and stops with can we as a nation survive much longer with only 8 or 9% with men and women making something. if you think you can, you can. then we go to where we must immediately see a manufacturing renaissance. it is in the $3 trillion of the decrepit infrastructure. you did have the policy and then as the kick in the pants, the opportunity would be in our dome infrastructure, until we got this thing balance. >> that is your number one recommendation in the tax form report. talk about some of the other
recommendations. >> i think the group felt very strongly about two issues. banks coupled by domestic and a more harsher perspective on china trade. let me digress if i can on the bank. it must be a bank. it must have an equity capitalization accompanied by a different capitalization. acute we know that from the wonderful treasurer of the state of california, calpers would love to have an investment opportunities in a national infrastructure bank to be a leverage for that bank. a superb idea of the members of
the senate into the house. we cannot get past tim geithner who want no banks except his banks. i cannot find a smaller loan today if my life depended on it. jpmorgan gave a loan commitment mobile, whichy team mobi- is a problem. >> one of the things that this report recommends is that we move to balance our trade in
five years. we need to balance our trade. the administration has set a goal of doubling exports. imports are increasing faster than exports. when you have a negative export figure, that is a drag on your economy. we have amassed a net export figures year after year. warren buffett advocated that the united states needs to adopt policies to balance its trade. people always hear china loans so much of our treasury. we are dependent on it. where does china get the money to own so much of our treasuries? we gave it to them to run these massive trade deficits year after year.
when the dollars come into china, the chinese government issues bonds to set up what you want. they buy our treasuries. they get income from a high treasuries. it is a crazy thing for this country to let go of. we are a another day older and deeper in debt. we have to change the trends here. when kennedy said we are going to get to the millan, nobody knew how to get to the millan, but we can figure these things -- moon but can figure these things out.
>> i want to comment on infrastructure. this is the goal of rebuilding our sector. as we are debating and reducing into doing a deficit the deal, which will cut the amount of fixed income, there is a shortage of a fixed income debt that is occurring because of the collapse of the mortgage market. as baby boomers approach retirement, fixed income becomes much more important to them. emerging markets population, there is going to be an additional flood of capital.
we need to generate attractive fixed income investments that a national infrastructure bank would have to have a banking and financial system in the world. you put together the infrastructure and what the bank says -- it leverages and puts to work all of this idle capital. add in all of the excess liquidity floating out in global economy. you crowd in a like-minded amount of putting private capital -- the crowd in private investment into the multiplier factor of infrastructure investment that it has.
they also facilitate not just directly the manufacturing sector. more importantly, some other key sectors of the economy, upon which america's future rests. the energy and transportation systems. we have an abundance -- we talk about solar and natural gas. we have an enormous abundance located in all parts of the country. we do not have an infrastructure to move that or put it in use. we have trillions of dollars of investment to build out that infrastructure to make us balance our energy. we have an enormous potential if we rebuild the manufacturing
base to convince and services around the country. one of the principal ways of doing that is in our waterways. not just the mississippi, but also the great lakes. they are not as energy efficient. these are ways to move goods and services around the world. we need to move the goods and services in a much more efficient and attractive way, which makes it very attractive to manufacturing at the center of the country. whether it is in the great lakes or texas. infrastructure investment where we can leverage a small amount of public capital into a much larger -- take dollars off the
sidelines, put it to work, has an enormous appeal as the centerpiece of economic recovery and jobs program. >> before we turn it over to the audience for questions, does anyone have any other thoughts on specific proposals here? a professor that is supposed to be a member of the panel, i just wanted to know if you had any thought of your own? the director of the partner of international affairs --
>> i am going to hide back in the corner. thank you. i want to thank leo and the new american foundation for all of their work on this. it is time in critical. it goes without saying that when you are in a crisis, it is urgent. we cannot afford to get all of our studies done and the answers are here. we have to act as the senator mentioned by showing true leadership in and out of government. a couple of quick points.
one of the recommendations and one that has not. there is a critical one. we are shocked at the push back that many received when we are trying to get america locked in the recovery act. it was seen as protection. we would like to call it industrial policy. economic security. when we are talking about by america, we are talking about buying goods produced here in america, u.s. supplies and raw materials, but we also have to ask ourselves, that the tax payer would be shocked to learn that some things would be considered domestically made
only have 61% domestic content in them. if you ask most folks down the street, it would mean an entirely different thing. it is really made here in the u.s.. there is no uniform guidelines around government on defining what is domestic content. some would be shocked to learn that intangible items are figured in to determine what domestic content is. those things should be low hanging fruit. it would be interesting to see those that pose that, when ec unemployment as high as it is. make sure our government procurement has something here. it goes to employment impact statement. they have been around in the
tested for a long time. it does not appear that many government agencies have incorporated a simple question lending out a contract, awarded, military issue, or an even smaller one to simply ask the question, how many direct jobs is this going to create in the u.s.? what kind of jobs will be created, and how long will they last? these are simple questions that should be factored in. at least they would give policymakers much more information that they can consider when they fund government programs and so forth.
>> it has to be an investment that is in addition to not a substitute for the federal grant levels that we have right now. you have to be careful. we do not have to spend any federal money whatsoever on the infrastructure. to really invest in long-term infrastructure projects, you need what i referred to as patient capital. here is a place where we can get a to for. my committee has been having a series of committees that i started over a year and a half
ago. what happened with pensions in america and the fact that people are losing their pensions at an alarming rate. it went from a defined benefits and contributions so everyone can have their 401k and a ticket with them. it has been decimated any kind of a pension system. we know now to other three people that have for one case that will approach retirement in the next 20 years do not have sufficient money. a lot of people are taking out what sums. one out of every four persons in america today have absolutely zero amount of money in pension.
zero. we need to rejuvenate the pension system, so that we have a defined benefit program. we can build a hybrid system so it is portable and you can move around, no matter where you go. that provides you with patient capital. that is where the infrastructure banks go to get that kind of capital. now you have a pension system that will pay back people later on. i hope we can keep that in mind about a fine benefit pension plan. >> we will take some questions. my name is martin apple. i want to commend you on being
able to integrate the whole number of separate realms and ideas. you have to integrate a lot of parts in the system. we seem to always get to and it seems to be average trade balance with china. with all your sense of data -- if you look at how it came about, we have a mechanism that was supposed to solve this and prevent this from happening. it does not work. they set it up so it can function to solve the problem
based on currency exchange. if we set a time limit and have it completely done, there will be some friction between us and china. they have their own view of what america looks like, and so do we. currency goes up 40% -- we have to make an exchange that can help generate the necessary stay at home price. patient capital, i love the idea, but there is another way to look at it. it makes the large companies in the country look at short-term profits. that driving force has been
--hing one of the driver's we have a lot of invention in this country. as soon as it becomes a valuable enough, it has the opportunity to go offshore. you have a good set of steps to begin. i appreciate you looking at community colleges and how to integrate it. we have a university system in which the people that graduate are able -- can we can find this to questions and not speeches? thanks. >> in terms of trade, we spend a lot of time on enforcement of existing agreements, which the senator spoke to.
we advocate for tariffs. in the area of corporations, i am strongly opposed to a lot of these multinational practices. we do not have in place a tax structure to do the right thing. it is one of the greatest insults' to the american people. everybody in this room into a nation wants to fix the education system. there are millions of sufficiently educated and motivated and unemployed americans to fill any gap that we need to fill in the midterm.
>> thanks. let's take more questions and please keep them short and make sure they are questions. identify yourself at the outset. >> paul gallagher. i just wanted to bring up you creating jobs -- the out of whack banking system that is exhausting the credit of nations. >> is there a question in there? >> we can see in europe, that the policy spirals on and on. i wanted to bring up that restoration introduced in the congress, both democrats and republicans are pushing for that
bill. i invite anyone in the panel to comment on that. >> id is relevant. i understand exactly what happened when that mistake was made and glass spiegel was repealed. it ought to be instituted for many reasons. >> the other part of the roosevelt agenda was to create a system. my friend has an important system on how you create a system that has been eroded over the last 10-15 or 20 years. it seems like the first missing piece with the infrastructure bank in particular has been put in place for ways to channel
excess idle capital into productive and public and private investment. one of the true legacy is that was put in place in the 1930's and 40's. >> we all have a votes that we could change and that we are proud of. i was 8 -- one of eight senators -- i did not mean to do that. i remember the pressure put on us by the white house, larry summers, that this was the way to go, the thing to do.
[unintelligible] >> let's take some questions at the back of the room. the lady at the back of the room. >> i am a freelance writer. one thing that always seems to be left out is how to remove impediments to existing jobs? what concerns me is the growing practice of use of credit reports by employers. there has been a bill setting in congress forever that is not getting any traction.
i want to know from the panel if this is an area of work that they are considering bringing in the task force. it is creating an underclass of millions of under employable people, like me, who have degrees from oxford and a georgetown and cut out completely from federal work, contacting, and many private sector jobs, because if the requirement to have sterling credit, even though we know credit reports are often sold with errors. >> there are many issues involved in getting the american economy back on track. you just raised one other. there are probably several dozen of discrimination problems that exist.
reporting can be useful. they can also be very -- it has to be looked at in the context of employment discrimination of many types. that happens to be one. the overarching issues -- is one of the things we deal with. i would like to take this opportunity -- i with like to get out of town before the faa shutdown. thanks very much. [applause] [unintelligible] >> congressman, we have not heard from you.
>> i want to salute all of you. we are in a crisis. you all know that. what is driving me and all of you -- i was somewhat relieved. i wondered what we would have to do if geithner leaves. he is a good professor. we are at a crisis. we have got to get to building things with american hands. until we can do that, we will continue to build our own way. i think it is okay, even though md in set in, we have that this
situation. it is ok to have a debate on it. we have the capacity to do other things, all of these other things you are talking about. why aren't we doing that? we know we have to do, go to any state, in the city, and you find out that we are falling way behind. we think we are going to compete. >> thank you congressman. it is time for one more question. >> quick things that have to be brought up. im rick lopez.
these questions are directed to the representatives. it is pretty obvious that mr. obama has come out publicly and pushed the agenda of real brutal austerity and is talking about putting social security on the table, which many citizens knows is the chopping block. will there be serious resistance? this is a more technical question. if we look at the effect of sustainable technology on third- world countries, it is really murderers. you cannot run a modern day hospital with a wind mill. it is just not possible. are you willing to reconsider technologies that are efficient. to deal with the crisis of nuclear power development. the media has been hysterical about making people afraid of
nuclear power. should we have programs like this, the right kind of programs that stimulated the economy? >> there will be resistance to medicare or social security. it does not contribute to the debt. looking ahead, when so security is 75%, to make up that additional 25%, for probably the next 50 years, we talk about raising the cap on payroll taxes. why is it fair that someone who makes $50,000 a year pays
payroll taxes on every last dollar? someone who makes $500 a year pays only 20 cents of $1. why is that fair? simply by raising the cap so we have sufficient funds to take care of any problem for the next 50 or 75 years. we are going to resist. i can remember in the 1990's with gingrich, and wall street has wanted to get their hands on some of that money. talk about always wanting to get their hands on something. we have to be very careful about privatization on energy, and the
cheapest barrel of oil is what you do not buy. that means conservation. here are jobs, infrastructure jobs. just rebuilding, if that is the right world. renovation. renovating the buildings to make them energy efficient. a huge savings. you could lock in american made goods. new heating and ventilation conditions -- systems. maybe i do not have all of the data. you employ a lot of people to do that. you talk about nuclear power,
and a lot of that is okay for the future, but why are we not focusing on the things that can create jobs, stimulate manufacturing in america, and save energy all at the same time? >> thanks very much. thanks to the panel. i think we have a lot of agreement here. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] --2011. [unintelligible] >> next, live, your calls and
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